Having a baby is really stressful. You’ve got a lot of expenses, and even some that you don’t know about. While it should be an exciting time, it’s also a time to get your money in check. Here are the 7 money moves you should make before the baby arrives.
1. Life Insurance
There is no better time than pre-baby to get yourself some life insurance. It’s cheap when you are young and healthy, so grab yourself a term policy for now. This will be enough coverage to get you started. Aim for 8-10 times your income for a good base amount.
2. Automate Savings
Savings should be a fixed expense in you budget. It should be something that you HAVE to do each month, not WANT to do. Automating your savings ensures that the money will move directly from your paycheck or bank account into your savings account without you having the ability to get your hands on the money. Once it’s in your bank account, game over.
I’ve talked about the importance of negotiation, and it’s really key to saving money. Don’t be afraid to give it a try. Start with your cell phone, cable and internet companies. You would be surprised how much you can save a month just by negotiating a few times a year.
4. Choose a Guardian
You’re going to need to choose a guardian for your little baby. If something were to happen to you, I am sure you would want to make sure your child is well taken care of. Don’t take this step lightly. Find someone who you know would raise your baby the same way you would, and someone you trust. Make sure you note this in your will. It can change over time, but always make sure you write it down.
5. Practice Makes Perfect
It’s common that one person will stop working when you have the baby, which means one less paycheck. Practice for a month before the baby arrives. Take your paycheck and put in savings. See how you make out on one paycheck, and then make adjustments. Better now than when the little bundle arrives and things get REAL.
6. Health Insurance
Now’s the time to get really cozy with your health insurance. Most people don’t understand what co-pays, co-insurance and deducible means. You need to know how much money out-of-pocket your will be so you can make sure and beef up your savings. This is serious stuff, and serious money. Some deductibles are $5000. That’s a lot of pocket change to find. Call your insurance carrier and tell them what hospital you will deliver at – yes, some hospitals charge more than others.
Don’t be ashamed to ask friends for hand me downs. There are a million little things you will need to get for the baby, and that means a lot money to be spent. If someone has an extra stroller, or bed or even some clothes, take them up on the offer to use them. Now is not the time to be stuck on the status of having everything new.